Forex Trading can be an intense and stressful undertaking that requires a strong control of your emotions. Forex is not a "get rich quickly" scheme. Learning to trade Forex takes patience – it will take you time before you master the basics. Those who lack discipline or make decisions that are not carefully thought through will quickly find themselves in a negative investment position.
Those who do not adhere to sound investment principles or who allow emotion to govern their thinking will quickly find themselves losing a grip on their investments. However, those who follow sound investment principles will reap the benefits of one of the world's most liquid and influential markets.
Below is the simple Knowledge Base dictionary of Forex trading
A
‘Abnormal Market Conditions’ — ‘Rapid Market’ or ‘Thin Market’.
‘Account History’ — a register of completed transactions, balance operations and cancelled orders in Customer’s account.
‘Asian Session’ — 23:00 – 08:00 (Tokyo)
‘Ask’ — the price at which a seller or a market maker is willing to accept for a traded instrument, also known as the offer price; a price for establishing an open Buy position.
‘AUS 200’ — Other name for the Australian Securities Exchange (ASX 200). 200 stands for top 200(by market capitalization) companies listed on the ASX.
‘Available Margin’ (‘Free Margin’) — remaining funds in Customer’s account with the deduction of margin, floating profit/loss and rollovers summary.
‘Aussie’ — ‘Ozzie’ or ‘Oz’, refers to the AUD/USD currency pair.
B
‘Balance’ — a summarized financial result of all funds deposited in and withdrawn from Customer’s account and of all closed positions in Customer’s account.
‘Base Currency’ — The first currency in a currency pair (for example if EUR/USD rate is 1.3283 then one EUR is worth 1.3283 USD).
‘Base Rate’ — Given country's central bank lending rate used by banks to calculate the interest rate to borrowers.
‘Bearish / Bear Market’ — Slang for down trend market (price is declining) activity.
‘Bear’ — Slang for trader who expect prices to decline / Trader who is holding short position.
‘Basis Point’ — A unit that describes the minimum change in the price of a product.
‘Bid’ — The price at which a seller or a market maker is willing to buy a traded instrument; a price for establishing an open Sell position.
‘BOC’ — Bank Of Canada (The Central Bank of Canada).
‘BOE’ — Bank Of England (The Central Bank of the UK).
‘BOJ’ — Bank Of Japan (The Central Bank of Japan).
‘Bull / Bullish Market’ — Slang for uptrend market (price is rising) activity.
‘Bull’ — Slang for trader who expect prices to rise / Trader who is holding a long position.
‘Bundesbank’ — The central bank of Germany (Slang BUBA).
‘Buy Limit’ — a pending order for establishing an open Buy position in Customer’s account in the event the price on the specified instrument falls to the specified level; can only be executed at the Ask price and placed below the current Ask price of the specified instrument.
‘Buy Position’ — an open position that represents the expectation that market price will increase. For example, buying the base currency against the quote currency or buying a contract for differences on an underlying security rate.
‘Buy Stop’ — a pending order for establishing an open Buy position in a Customer’s account in the event the price on a specified instrument rises to the specified level; can be only executed at the Ask price and placed above the current Ask price of the specified instrument.
C
‘Cable’ — Slang for GBP/USD currency pair.
‘CAC40’ — Short name for French Stock Exchange; 40 stands for top 40 companies (by market cap.).
‘Candlestick Chart’ — One of the ways to view or show a chart. It indicates opening and closing price in a chosen date range. If the close price is higher than the open price, then area of the candlestick is not shaded. But if open price is higher than the close price, then it will be shaded.
‘CBs’ — Short for central banks.
‘Central Bank’ — the government institution that manages a country’s monetary policy.
‘CFD’ (Contract for Differences) — an object of electronic transaction based on the price fluctuation of an underlying asset (for example, stock or futures contract).
‘Chart’ — graphical representation of historical quotes in the form of line, bars or candlesticks.
‘Client Log-file’ — a text file located in the folder MetaTrader4/Logs and used for recording all requests of client terminal; it is created in the form of separate daily files.
‘Client Terminal’ — the MetaTrader 4 program of version 4.хх designed for Customer trading, exercising supervision over Customer accounts, obtaining real—time and historical quotes, news and other market information that Trading may have made available to Customer; also commonly used for technical analysis, automated trading by Expert Advisors and for Customer feedback via internal mail system.
‘Close’ — a request or instruction for closing a specified position at the current market price.
‘Close By’ — a request or instruction for closing the two locked positions on the same instrument.
‘Commission’ — an amount of service payments charged to Customer’s account.
‘Contract’ — a standard unit (for example 1 lot) used in the Forex market.
‘Contract Details’ — parameters of an instrument specified by Trading for Customer trading and published on Trading's website.
‘Counterparty’ — One of the participants in a financial transaction.
‘Currency Pair’ — traded instrument based on the change of the value of one currency against another currency.
‘Customer’ — a physical or juridical person, a signatory of Customer Agreement with Admiral Markets.
‘Customer Account’ (Account) — Customer’s personal system register of its transactions, orders and balance operations.
D
‘Data feed’ — a stream of quotes in AM MetaTrader 4 trading platform.
‘Dealer’ — Trading’s employee responsible for accepting Customer requests, executing Customer orders and carrying out the liquidation of Customer open positions in the event of Stop—Out.
‘Deficit’ — Negative balance for trade or payment (insufficient funds).
‘Depo’ — Money deposit on account.
‘Demo Account’ — Practice account.
‘Dispute’, Complaint, Claim — the event Customer believes that Trading’s action or inaction is erroneous or contradictory to these Terms or/and to the Customer Agreement, and vice versa.
‘DJIA or Dow’ — Short for the Dow Jones Industrial Average or US30.
‘Dove’ — Refers to easier monetary policy or lower interest rates. Opposite of hawkish.
‘Downtrend’ — Declining price action which can be described as lower-lows and lower-highs.
E
‘ECB’ — European Central Bank.
‘ECN’ — Electronic Communication Network. This system eliminates third parties in the execution of order.
‘EST/EDT’ — New York City time zone (United States Eastern Standard Time/Eastern Daylight Time).
‘ESTX50’ — Short for the Euronext 50 index.
‘European Session’ — 07:00 – 16:00 (London).
‘Expiry’ — an instruction for cancellation of pending order at specified time and date.
‘Expert Advisor’ — a program written in MQL4 (MetaQuotes Language 4) and executed by a client terminal for the purpose of automated trading in Customer’s account.
‘Equity’ — a net worth of funds in Customer’s account.
‘Exotic pair’ — less traded currency pair.
‘Explicit Error’ — an event when then opening position or closing price significantly differs from the market price at the actual moment of execution; an event the execution of Customer’s order or request is inconsistent with its order or request by general meaning.
F
‘FED’ — The Federal Reserve Bank, Central Bank of the United States of America.
‘Floating Profit/Loss’ — a difference value between Customer's account equity and balance.
‘Fill’ — Means the order has been successfully and fully executed.
‘Fill or Kill’ — Order type, if the order cannot be filled, then it will be cancelled (killed).
‘FOMC’ — The Federal Open Market Committee, the policy setting committee of the FED.
‘Foreign Exchange’ — ‘Forex’ “FX’. The global market of buying and selling of currencies.
‘FRA40’ — Another name for CAC 40.
‘FTSE 100’ — Short name for UK 100 index.
G
‘G7’ — Group of seven nations – USA, Japan, Germany, UK, France, Italy and Canada.
‘G8’ — G7 + Russia.
‘Gap’ — significant difference between two consecutive quotes; may be shown on charts as a blank field between bars or candles when the time period between the two quotes covers the bar’s or candlestick’s close time.
‘GDP’ — Gross Domestic Product. Total value of a country’s output, income or expenditure produced within its physical borders.
H
‘Hawkish’ — Refers to tougher monetary policy or higher interest rates. Opposite of dove.
‘Hedge’ — Combination of positions or position that reduces the risk of your primary position
‘Hedged margin’ — Trading margin requirements for maintaining locked positions.
‘HK40 / HKHI’ — Short name for the Hang Seng Index.
I
‘Initial Margin’ (Margin) — Trading’s requirements for a security collateral to open a position.
‘INX’ — Symbol for S&P 500 index.
‘Instant Execution’ — a request execution type that means all quotes shown in client terminal may be accepted by Trading for the purpose of the Customer trading with no preliminary requests for quotes.
RELATED TOPIC: INTRODUCTION TO FOREX TRADING
J
‘JPN225’ — Short name for the NIKKEI index.
K
‘Kiwi’ — Slang for NZD/USD.
L
‘Leverage’ — transaction size/margin ratio; for example, the 1:100 leverage means that the Customer is required to have 1% of transaction size in its account as a security collateral (i.e. margin).
‘LIBOR’ — The London Inter-Bank Offered Rate. Banks use LIBOR as a base for international lending.
‘London Session’ — 08:00 – 17:00 (London).
‘Long position’ — When the base currency in the pair is bought, the position is considered to be long.
‘Loonie’ — Slang for Canadian dollar, also known as Funds.
‘Login’ — Customer account’s unique identification number.
‘Locked Position’ — a position consisting of equivalent long and short positions on the same instrument; locked positions require 50% of summarized margin for both positions.
‘Lot’ — a transaction size unit in MetaTrader 4; with reference to currency pairs, 1 lot is equal to a contract on 100,000 base currency units; with reference to stock CFDs, 1 lot is equal to one unit of an underlying security.
‘Lot Size’ — an amount of base currency units or underlying asset units specified by Trading contract details as a transaction size per one (1.0) standard lot.
M
‘Margin’ — a summarized value of an account’s available funds reserved as a security collateral for maintaining a Customer’s open position in accordance with Trading's Margin Requirements.
‘Margin Level’ — an equity/margin percentage ratio.
‘Margin Trading’ — a customer trading service utilizing the leveraged technique that provides Customer with ability to make transactions exceeding its account’s deposit.
‘Market Opening’ — the time when instruments become available for Customer trading after weekends, holidays, regular closing intervals or server downtimes.
‘Market Order’ — an electronic instruction for opening a position in the Customer’s account at the current market price.
‘MetaTrader 4’ — a software platform designed for online trading; consists of: MetaTrader 4 Client (‘client terminal’), MetaTrader 4 Server (‘server’), MetaTrader 4 Data Center (‘data—center’), MetaTrader 4 Multiterminal (‘multiternminal’), MetaTrader 4 Mobile, MetaTrader 4 Smartphone; it is a technological basis of Trading’s customer trading services.
‘Modify’ — a request for modification of a pending order level; a request for placement, cancellation or modification of ‘Stop Loss’ or ‘Take Profit’ levels on an open position or pending order.
‘Trading’ — a dealer in contracts for differences on spot foreign currencies, stocks and futures. It is a List F IFSC Belize authorized entity ‘Trading Website.
‘Multiple Close By’ — a request or instruction for closing all locked positions in the Customer’s account.
N
‘New York Session’ — 08:00am – 05:00pm (New York time)
‘Normal Market Conditions’ — antithesis to ‘Rapid Market’ and the absence of market data errors.
O
‘Open Position’ — a contract for buying or selling an instrument enforced in the Customer’s account; it is the first part of a complete transaction and an obligation for making an equal counter transaction afterwards; it is also treated as the Customer’s obligation to satisfy Trading’s Margin Requirements and to maintain, without notice or demand from Trading, a sufficient account balance at all times to continuously meet Trading’s Margin Requirements and equity/margin minimum ratio specified by Trading (for example, a minimum ratio of 30%).
‘Order’ — an electronic instruction for opening or closing a position in the Customer’s account on a specified instrument in the event its price reaches the specified level.
‘Order Level’ — a price specified by Customer in an order placement request as an instruction for opening a position in Customer’s account at a certain price under condition determined by the order’s type.
‘OTC’ — Over the counter. Describes any transaction that is not conducted via an exchange.
P
‘Pending Order’ — an electronic instruction for opening a position in Customer’s account in the event the price of a specified instrument reaches a specified level; Customer is provided with the ability to use pending orders of the following types: Buy Limit, Sell Limit, Buy Stop, Sell Stop.
‘Platform Time Zone’ — a time zone that the Trading server is synchronized with; it is used for recording any events into the server log—file. MetaTrader 4 is currently synchronized with London time (GMT+0; daylight saving time — GMT+1).
‘Point’ — a minimum difference of the price change; for example, 0.0001 for EUR/USD (also called ‘pip’)
‘Price’ — 1) a two—way quote; consisting of Bid and Ask prices; 2) opening position or closing price; 3) order level;
‘Price Gap’ — an event where the current Bid price is above the previous Ask price and vice versa.
Q
‘Quote’ — an electronic message about the current price displayed in Client Terminal; consists of demand price (Bid) and supply price (Ask).
‘Quotes Base’ — Trading's server’s archive file containing historical quotes.
‘Quoting’ — providing Customer with quotes that Trading may accept for buying or selling instruments in the Customer’s account.
R
‘Rapid Market’ — market conditions characterized by significant price changes in short periods of time frequently causing wide gaps between consecutive quote values. Commonly occurs immediately before and/or after important events such as: 1. key economic reports on any of the G7 countries; 2. press conferences of the G7 financial ministers or Central Banks’ chairmen; 3. Central Banks’ decisions on interest rates; 4. market interventions; 5. political or natural force majeure, war, terrorism etc.
‘Rate’ — 1) with reference to currency pair — base currency value in quote currency; 2) with reference to CFDs — underlying asset value.
‘Request’ — 1) an electronic instruction for opening or closing a position, placement, cancellation or modification of order, given by Customer via client Terminal; 2) a query for a two—way quote.
S
‘Sell Limit’ — a pending order for establishing an open Sell position in Customer’s account in the event that the price on the specified instrument rises to the specified level; can be only executed at Bid price and placed above the current Bid price of the specified instrument.
‘Sell Position’ — an open position that represents the expectation that market price will decline. For example, selling the base currency against the quote currency or selling a contract for differences on an underlying security rate.
‘Sell Stop’ — a pending order for establishing an open Sell position in Customer’s account in the event the price on the specified instrument falls to the specified level; can only be executed at Bid price and placed below the current Bid price of the specified instrument.
‘Server’ — the program MetaTrader Server of version 4.xx, designed for transmitting requests of client terminals to dealers, news, quotes and execution confirmations to client terminals, and recording all messages related to customer trading process; it is a tool for maintaining mutual liabilities between Trading and Customer which are formalized in the Trading Customer Agreement, contract details and margin requirements.
‘Server Log—file’ — a text file generated by the MetaTrader 4 server and used for recording all events related to customer trading and platform performance, including all dialogues between client terminals and dealers.
‘Session Gap’ — a price gap between the first quote of the current market session and the last quote of the previous market session.
‘Slippage’ — a parameter of Expert Advisor designed for setting up the maximum difference between the requested price and the dealer’s price acceptable to Expert Advisor for opening a position in Customer’s account; a difference between order’s price and the price of its actual execution.
‘Spike’ (Data Error) — an incorrect quote generated by the server as a result of data feed error; commonly looks like a significant price gap returning close to the previous level on the next price update with no signs of rapid market around. Trading has discretion, but without obligation, to remove such errors from its quotes database.
‘Split Close’ — a partial position closing; for example, closing 0.5 lots of 2.0 lots.
‘Spread’ — a difference between Bid and Ask price, evaluated in points.
‘Stop Loss’ — an order for closing a specified open position at specified level in the event the price moves in an unfavourable direction; can only be executed at Bid price and placed below the current Bid price with reference to Buy positions; can only be executed at Ask price and placed above the current Ask price with reference to Sell positions.
‘Stop Out’ — a compulsory closing of Customer’s open positions by Trading in the event Customer’s account does not satisfy Trading’s Margin Requirements.
‘SWAP’ — an amount of overnight adjustments paid or charged to Customer’s account at 23.59 in the platform time zone, in accordance with values specified in contract details; it is a daily settlement for margin trading services.
‘Swissy’ — Slang for Swiss Franc.
‘Symbol’ — an object of electronic transaction, for example: currency pair, stock CFD, futures CFD; an instrument in the MetaTrader 4 online trading platform.
T
‘Take Profit’ — an order for closing a specified open position at specified level in the event the price moves in a favourable direction; can only be executed at Bid price and placed above the current Bid price with reference to Buy positions; can only be executed at Ask price and placed below the current Ask price with reference to Sell positions.
‘Thin Market’ — periods of low trading activities and amounts of quotes per time, as compared to normal marker conditions; for example, periods between 21.00 and 00.00 GMT and before Christmas holidays.
‘Ticket’ — a unique identification number of position, order or balance operation in Customer’s account.
‘Trailing Stop’ — a built-in option of the client terminal designed for adjusting a Stop Loss order level automatically by a specified amount of points, if the favourable price motion exceeds this amount; it may only work with the client terminal connected to the server.
‘Transaction’ — an operation consisting of two equal counter trades in a specified instrument.
‘Transaction Size’ — lot size multiplied by amount of lots.
U
‘UK100’ — Short name for FTSE 100 index.
‘UK OIL’ — Short name for Brent Crude Oil.
‘U-Shaped Recovery’ — Shape in charting. U-shaped recovery is a gradual rise back to its previous peak after gradual decline.
‘Uptick’ — A new price quote at a price higher than the previous quote.
‘US30’ — Short name for the Dow Jones index.
‘US OIL’ — Short name for WTI Crude Oil.
V
‘Value date’ — Future date on which counterparts to a financial transaction agree to determining the value of a product in price. In the case of a spot foreign exchange trade it is normally two business days after a transaction is agreed upon.
‘V-Shaped Recovery’ — Shape in charting. Such recovery involves a sharp rise to previous peak after a sharp decline.
‘Volatility’ — Measure for fluctuation of the price of a financial instrument over time. Delegate to active market that present trade opportunities.
W
‘W-Shaped Recovery’ — Shape in charting. Change of sharp decline, rise, decline and ending with another sharp rise. Middle part of shape can be lower than the two price peaks on each side.
‘Whipsaw’ — Slang for very high volatility market where price is moving similar to “whipsaw” at work. Price movement is followed by a sharp and quick reversal movement.
‘Working order’ — Stop or Limit orders that has been placed but not filled yet.
X
‘XAG/USD’ — Symbol for Silver Index.
‘XAU/USD’ — Symbol for Gold Index.
Y
‘YOY” — Year on year. Any measurable event that recur annually. It is a popular way to compare the performance of investments from one year to another.
‘Yield’ — Percentage based income return on an investment.
To your Success and Understanding.!!!
No comments:
Post a Comment